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A, B and C share profits in the ratio 3:2:1. After C retires, A and B agree to share profits in the new ratio 4:3. What is B’s gaining share?

Answer and explanation

Correct answer: 2/21

B’s old profit share was 2/(3+2+1) = 2/6 = 1/3. Under the new ratio 4:3, B’s share is 3/7. Therefore, B’s gaining share = new share − old share = 3/7 − 1/3 = 9/21 − 7/21 = 2/21. Exam tip: Always subtract the old share from the new share to find a partner’s gaining share.

Related tags

Gaining ShareNew Profit RatioPartner RetirementRatio CalculationAccountancyNew RatiosReconstitution Retirement Or Death Of A PartnerClass 12 Mcq

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